Isra-Mart srl: Green leaders urge Cameron to intervene in solar subsidy fiasco

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A coalition of 51 solar power firms, housing associations and politicians have written to Prime Minister David Cameron urging him to intervene to block government plans to halve feed-in tariff incentives for photovoltaic installations, with effect from next month.

The open letter, dated 1 November, emerged as the latest part of a mounting campaign opposing the consultation launched by the government last week, which proposes reducing the incentive for solar photovoltaic installations with more than 4kW of capacity, from 43p/kWh to 21p/kWh.

Controversially, the reduced incentives would come into effect from next April and apply to all solar installations completed after 12 December, giving the solar industry just six weeks to prepare for the changes.

Signatories of the letter include Juliet Davenport, founder of Good Energy, Green MP Caroline Lucas, and Stephen Howlett, the chief executive of Peabody, one of the largest and oldest housing associations in London.

It calls for more moderate cuts to those proposed in the consultation and the removal of an £856m cap on the feed-in tariff (FIT) budget imposed by the Treasury.

"We urge you to request the chancellor of the exchequer revisit the spending constraints his department has placed on a scheme which makes no contribution to reducing the government deficit and is funded by energy companies, and to give special consideration to the contribution it has made to the UK's social housing sector," concludes the letter.

It also calls on Cameron to recognise the way in which solar energy is benefiting social housing schemes. The 18 social landlords who signed the letter are responsible for a total of 316,000 homes around the UK.

The government's proposals mean that aggregated solar schemes face a further 20 per cent cut to incentives on top of the 50 per cent already planned for small-scale installations, taking the tariff down to 16.8p/kWh.

"At a time of great economic uncertainty, FIT installations are one of the very few things that social landlords can do to support their tenants," the letter states. "However, the proposed level of these reductions will, quite simply, render new projects financially unviable.

"For the vast majority of social landlords, the risks of projects will be too big and the return on investment too small."

In a separate open letter to the prime minister released on Friday, Jeremy Leggett, founder of Solarcentury, issued a heartfelt plea to Cameron to stand by his earlier commitments to support the development of the UK's solar industry.

The letter recalls Cameron's decision to host media events at Solarcentury's headquarters and draw on the company's assistance to develop its position on green issues.

"In the early months of your premiership... I was very proud to be able to accompany you to India and genuinely welcomed prospects for the 'greenest government ever'," Leggett writes. "Eighteen months after the election, this company has done everything asked of it by your government. We have invested, innovated, researched, exported, manufactured, supported Big Society projects and created jobs winning a Queens Award for Enterprise only last year. But today, surveying the wreckage caused to my company by Monday's DECC announcement, I have to ask you prime minister, where did it all go wrong?

"The immediate impact of DECC's unlawful decision on Monday for my own company and the industry is that bad news is hitting us from almost every quarter."

The letter draws on the government's own impact assessment to argue that the cost to energy bill payers of giving solar firms sufficient time to prepare for the proposed cuts would amount to about £1 a year.

"Prime minister, an entire industry is being destroyed inside six weeks for the sake of saving households a sum of money roughly equivalent to purchasing one copy of the Daily Mail per year," the letter states. "The Impact Assessment published yesterday reveals the cost of delaying the 12 December deadline to a date consistent with Energy Act procedures can be measured in pennies rather than pounds on average annual household energy bills."

It concludes by urging the prime minister to "intervene personally on this issue to safeguard the livelihoods of 25,000 solar staff, and to reduce the number of bankruptcies that are set to engulf the industry as a direct result of this decision".

A spokesman for Number 10 failed to respond to BusinessGreen's enquiries as to whether Cameron would address calls for a u-turn on the cuts to feed-in tariffs.

He also side-stepped a call to intervene in the cuts, when asked to do so by Labour MP Alan Whitehead in Parliament last week.